What out-of-the-ordinary, cost-saving measures are you using on your farm?

Join a machinery co-op

Our local agriculture federation has a machinery co-op. It’s especially useful for smaller farms that might need particular pieces of equipment for just a few days or weeks out of the year. You get the use of a relatively new piece of equipment at an affordable price.

About 40 pieces of equipment are available through the co-op: round baler, fertilizer spreader, manure spreader, blades, backhoes, round bale tubers, no-till seeder, hay rakes, etc. We take the anticipated ownership period of each piece of equipment and estimate usage, repairs and salvage value to come up with a rental fee.

Some rents are per day and some are per acre, whatever makes sense. Local equipment dealers have been very helpful with the program and help with the costing.

Run financial models

We have two professional accountants with a lot of experience on staff to run financial models. I had never before realized the full value of that skill set.

For example, a waste heat project only goes ahead if you have numbers that allow good decisions. It’s also important to run a sensitivity analysis to show financial projections if some of the underlying assumptions were to change.

One of our best opportunities is in value added packaging, but you need to do the math to know the pricing points that make it work. Based on experience, we have a pretty good idea on what we need to charge, but financial modelling gives us a lot more confidence.

Grow corn as a feed crop

Our main method of reducing costs is to spend more money up front to grow corn rather than other less expensive feed crops. Because of the growth we can achieve, the cost per tonne of production is less and, more importantly, the cost per day for an overwintering cow is substantially less.

Corn is a crop that responds to inputs. We spend the money to grow a big crop and we’ve had good success with it over the last four or five years as a way to reduce costs.

While growing corn has a much higher cost per acre compared to alternate feed sources, our cost per day for an overwintered cow has gone down dramatically, roughly half of what the cost was with other feed sources.